What is the Bitcoin lightning network and its benefits?

What is the Bitcoin lightning network and its benefits?

Bitcoin’s antifragile protocol and its exponentially growing network effects make it a monster gradually engulfing global economic activity. The latest in these network effects is a second-layer protocol called Lightning Network, which uses the Bitcoin base layer protocol as security. Lightning Network is a second-layer protocol for blockchains designed to reduce transaction volume by processing payments instantly via a peer-to-peer payment channel network. Together, the Lightning Network and Bitcoin Blockchain can create a better and more complementary payment system that everyone uses today with faster transactions, lower fees and unmatched technical security. Specific details of transactions will not be recorded individually on the Bitcoin Blockchain. However, key details and confirmations of the settlement transactions will be recorded on the Bitcoin Blockchain. This means that these users still benefit from the longevity and security of the Bitcoin Blockchain while being able to send and receive payments much faster. As the transaction processing speed and transaction fees on the Bitcoin Blockchain fluctuate, there is no doubt that a solution is needed to ensure that the network can accommodate more users in the long run. In the short term, we believe that traditional channel payments will still be desirable, as the Lightning network is still young and difficult to use due to lack of wallets and user-friendly applications. However, over the long term, we believe that the transaction throughput on the Lightning network exceeds that of Visa or any other traditional centralized payment network. By transferring payments from the Bitcoin Blockchain, the adoption of Lightning Network will benefit those who wish to exchange value on the second layer. However, with the increase in the number of services and merchants adopting the network due to the efficiency provided by Lightning, new use case categories are being introduced. We believe this will in turn increase the demand for bitcoins as new industries and business models unfold.

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